It’s the season of dark clouds and tax forms. It’s that time of the year when all salarymen and businesses start filling out their Form 16’s to make their contribution to the government. For both these parties, filing Income Tax Returns aka ITR in 2024 is crucial. Why? To ensure they uphold the duty levied upon them by the state and comply with the laws enforced.
Taxpayers must navigate the complexities of tax forms, deductions, and documentation to avoid errors and penalties. Proper preparation and a strategic approach can transform this often daunting task into a smooth and efficient process. This article aims to offer expert tips on how to file your ITR in 2024 accurately and timely, ensuring a hassle-free experience and optimal returns.
1. Types of ITR Forms:
Choosing the right form is the first step to a smooth ITR filing checklist process.
- ITR-1 (Sahaj): Typically for individuals with income up to Rs. 50 lakh from salary, one house property, and other sources (excluding lottery winnings and racehorses).
- ITR-2: This is for individuals and HUFs not having income from profits and gains of business or profession.
- ITR-3: Antithetical to the previous form, this is for individuals and HUFs having income from profits and gains of business or profession.
- ITR-4 (Sugam): Finally, for individuals, HUFs, and firms (other than LLP) being a resident having total income up to Rs. 50 lakh and having income from business and profession under a presumptive taxation scheme.
2. Gather and Organize Necessary Documents
Before you begin filing your Income Tax Return in 2024, gather all the necessary documents and information. Key documents include:
- Form 16 issued by employers detailing your salary and tax deductions
- Form 16A/16B/16C for TDS on other incomes like interest, rent, etc.
- Form 26ASA which is a consolidated annual tax statement available on the Income Tax Department’s website.
- Interest Certificates from banks and other financial institutions.
- Investment Proofs for deductions under Section 80C, 80D, etc.
- Housing Loan Interest Certificate for claiming deductions under Section 24(b).
- Capital Gains Statements for details on the sale of property, shares, mutual funds, etc.
3. Verify Form 26AS and AIS
Form 26AS is a statement detailing tax deducted at source (TDS) – a percentage deducted at the time of making payments to the receiver and remitted to the state, and tax collected at source(TCS) – a percentage collected by the state at the time of sale from the buyer, and any advance tax or self-assessment tax paid.
Additionally, the Annual Information Statement provides an elaborate view of your financial transactions. Verify these statements so that all your income and taxes paid are correctly reflected on your ITR filing checklist and also make sure that discrepancies, if any, are reported and rectified before filing your return.
4. Claim Deductions Wisely
One solid tip on how to file ITR in 2024 efficiently is to maximize your tax savings by claiming all eligible deductions. Make sure you have valid proofs for these deductions to avoid further scrutiny. Some common deductions that your ITR filing checklist must include under the Income Tax Act are:
Section 80C: Investments in Public Provident Funds (PPF), Employees Provident Fund (EPF), The National Savings Certificate (NSC), in Equity Linked Savings Scheme (ELSS), and principal repayment of home loans (up to Rs. 1.5 lakh).
Section 80D: Premiums paid for health insurance.
Section 80E: Interest on education loans.
Section 24(b): Interest on home loan (up to Rs. 2 lakh for self-occupied property).
Section 80G: Donations to specified charitable institutions.
5. Report All Sources of Income
Underreporting or omission of income can lead to penalties and further interest charges. Keeping that in mind, accurately report all sources of income for a smooth ITR filing process. Apart from salary or business income, your ITR filing checklist must also include:
· Interest Income from savings accounts, fixed deposits, recurring deposits, etc.
· Rental Income from house property.
· Capital Gains from the sale of shares, mutual funds, or property.
· Other Sources like dividends, lottery winnings, etc.
6. Common Mistakes and Pitfalls to Avoid wile filing ITR:
Here are some common mistakes to avoid while filing ITR:
Incorrect Personal Information: Ensure that proper information while filing your ITR checklist like your name, PAN, and bank details are accurate.
Mismatched Income and Tax Details: Cross-verify income and TDS details with Form 26AS and AIS.
Wrong ITR Form: Filing the wrong form can lead to rejection and delays.
Missing Deductions: Double-check to ensure all eligible deductions are claimed.
Late Filing: File your ITR before the due date to avoid penalties.
Conclusion:Filing Income Tax Returns in 2024 has become a smoother process with the help of online tools and resources from the IT department and a pool of information available on the internet. The e-filing portal, with prefilled XML, simplifies data entry and reduces the margin of errors. For those with complex tax situations or uncertainties, seeking professional help from a chartered accountant or tax expert can be invaluable. By combining the use of digital tools with professional advice from PeopleWorks, you can achieve a smooth and efficient Income Tax Returns filing experience in 2024, at the peak of the internet era, securing your financial compliance and peace of mind.
